If you're running the 2.3 branch of WordPress it's a required update, as it fixes a security issue (among other things)

For the issue to be exploitable. the bad guy would need an account on your blog (even if it's just subscriber). When he has an account he can change the content of any post on your blog. (Inserting a malicious ifame is what we've seen most so far)

As this blog has been running pre-releases of 2.3 for some time, all the issues I had during upgrades have been fixed in the final version. So upgrading should be relatively pain free. There is a catch with plugins and themes that reference the now defunct categories (and link2cat and post2cat) tables. They will break your blog. So as always, disable all plugins before upgrading and activate them one by one afterwards to see if they cause issues. Most of those plugins have newer versions which are compatible with 2.3 and if they haven't, notify the author so he can make one.

Another issue that's popped up for a small group of upgraders is that they're unable to log into their blog after upgrading. If you experience this issue please report here, so we can pinpoint what's causing it and fix it!

All in all the first reactions to 2.3 are positive although some negative remarks are to be expected as well. I personally believe the positive things outweigh the negative things by far, so I'm quite pleased with the new release.